Hit by China and pressured by semiconductors... Government embarks on 'Saving the Display' mission

Display and Advanced Strategic Technologies Likely to Be Designated...Urgent Need to Secure 'Super-Gap'
China Ranked No.1 in Display Market Last Year...Samsung Withdraws from LCD Business
China Rapidly Chasing Advanced Technologies like OLED...Market Share from 1% to 16% in 5 Years
Need for Strategic Technology Designation Raised...Focus on Strong Tax Benefits

Samsung Display Private Booth
(Seoul=Yonhap News) Samsung Display unveiled its QD-Display at a private booth inside the Encore Hotel in the United States on January 4, 2022 (local time), a day before the opening of CES 2022. The photo shows the booth overview. 2022.1.5
[Provided by Samsung Display. Resale and DB prohibited]
photo@yna.co.kr
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＜Copyright(c) Yonhap News Agency, Unauthorized reproduction and redistribution prohibited＞

[Asia Economy Sejong=Reporter Lee Jun-hyung] The government's consideration of including displays in the national advanced strategic technologies stems from the alarming rise of China's 'display ambition.' Last year, China surpassed South Korea to become the global leader in the display market. This marks 17 years since South Korea overtook Japan in 2004 to become the frontrunner in displays. Chinese companies, backed by massive subsidies and tax benefits from their government, have launched a 'low-price offensive' without regard to cost. The steady recruitment of Korean technical talent with high salaries has also had an impact.

LCD Dominated by China... OLED Also Rapidly Catching Up

The LCD market, once dominated by South Korea, is now firmly under 'China's reign.' According to the Korea Display Industry Association, China's global LCD market share was 50.9% last year. Compared to just five years ago in 2016 (20.5%), this is an increase of 30.4 percentage points. During the same period, South Korea's LCD market share shrank by more than half, from 36.9% to 14.4%.

Samsung Display has also decided to withdraw from the LCD business due to China's rise. On the 6th of this month, Samsung Display will completely end its LCD business by using up the glass substrates in the L8-2 line at its Asan campus in Chungnam, which produces large LCDs for TVs. This marks about 30 years since Samsung first produced LCDs in 1993. Samsung Display is also promoting workforce reallocation, transferring about 300 employees from the LCD division to Samsung Electronics' semiconductor division.

China is also rapidly pursuing the advanced display market, including organic light-emitting diodes (OLED). China's share of the active-matrix OLED (AMOLED) market rose from 1.1% in 2016 to 16.6% last year. In contrast, South Korea's share steadily declined from 98.1% to 82.8% during the same period. BOE, China's top display company, showcased a 95-inch OLED for the first time last month at the 'Society for Information Display (SID) 2022,' demonstrating China's technological ambition. Although it has not yet reached mass production, China unveiled a large OLED on the same day LG Display introduced the world's largest 97-inch OLED.

Display Neglect Theory... "Tax Benefits Also Needed"

As concerns about the display industry grow, government support has been concentrated on existing national strategic technologies such as semiconductors. National strategic technologies, legally grounded in the Restriction of Special Taxation Act, currently cover only three fields: semiconductors, batteries, and bio. The National Advanced Strategic Industry Special Act, which will be enforced in August, was initially called the 'Semiconductor Special Act,' emphasizing support for semiconductors.

Given this situation, a 'display neglect theory' has emerged. An industry insider said, "There is a feeling of being neglected in government support compared to other advanced industries," adding, "As the government focuses on semiconductor development, the phenomenon of job seekers concentrating on semiconductors is intensifying."

President Yoon Seok-yeol Examining a Photomask
(Seoul=Yonhap News) President Yoon Seok-yeol is looking at a semiconductor photomask received from Minister Lee Jong-ho of the Ministry of Science and ICT during the Cabinet meeting held at the Yongsan Presidential Office Building in Seoul on June 7, 2022. 2022.6.7 [Provided by the Presidential Office. Redistribution and DB prohibited]
jeong@yna.co.kr
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＜Copyright(c) Yonhap News Agency, Unauthorized reproduction and redistribution prohibited＞

In response, the government has launched efforts to 'save displays' through national advanced strategic technologies, but there are urgent calls to designate displays as a national strategic technology. Unlike national advanced strategic technologies, which focus on research and development (R&D) support, national strategic technologies primarily offer strong tax benefits. For companies that need to secure a super-gap over China through large-scale investment, designation as a national strategic technology, which allows tax credits on facility investments, is essential.

The variable is the Ministry of Economy and Finance, the main department responsible for the Restriction of Special Taxation Act. It is reported to have a somewhat negative stance on adding displays due to concerns about reduced tax revenue. A ministry official recently stated in a briefing, "Semiconductors, vaccines, and batteries were designated as national strategic technologies amid global competition and rapid supply chain changes," adding, "Designation of national strategic technologies needs to be done restrictively under strict criteria."

This content was produced with the assistance of AI translation services.